Key Points
- Ingham Circuit Court Judge Rosemarie E. Aquilina granted a temporary restraining order against Kalshi this week.
- The platform must immediately cease offering sports-related prediction contracts to Michigan residents.
- Non-compliance with geolocation requirements could result in penalties of $120,000 per day.
- Nevada and Massachusetts previously implemented similar restrictions on Kalshi’s operations.
- The company maintains it will contest the ruling while implementing necessary limitations.
Prediction market platform Kalshi received a judicial order this week prohibiting its sports-related contract offerings in Michigan. Judge Rosemarie E. Aquilina of the Ingham Circuit Court issued the temporary restraining order on Monday.
The legal action follows a petition from Michigan Attorney General Dana Nessel, who contends that Kalshi’s sports prediction contracts function as unlicensed sports wagering rather than legitimate investment products.
According to Nessel, the platform’s operations cause financial harm to Michigan and its properly licensed gambling operators. Traditional sportsbooks pay regulatory fees and taxes on their earnings, requirements that Kalshi reportedly circumvents.
Judge Aquilina sided with the state’s position in her ruling. Her written decision emphasized that Kalshi operates with unfair competitive advantages over entities that comply with Michigan’s established gaming regulations.
The judge’s order also highlighted concerns about tribal gaming operators in Michigan. These organizations maintain legal betting services through government-approved compacts, and the ruling noted Kalshi’s apparent disregard for their regulatory authority.
Kalshi launched its sports prediction contracts in January 2025, following regulatory shifts at the Commodity Futures Trading Commission under the Trump Administration.
Federal regulators authorized Kalshi to provide these products under CFTC guidelines. The company’s legal position rests on the premise that federal approval supersedes state-level restrictions.
Geolocation Compliance Mandate
The restraining order mandates that Kalshi prevent Michigan users from accessing sports prediction markets. Additionally, the platform must implement geolocation technology from a vendor approved by the Michigan Gaming Control Board.
The court indicated flexibility regarding vendor licensing, potentially accepting providers licensed in other jurisdictions. However, any such vendor must still satisfy Michigan’s specific location verification standards.
Judge Aquilina established a daily penalty of $120,000 for failure to meet geolocation requirements. This figure stems from calculations based on Kalshi’s reported $600 million in daily transaction volume.
The judge apportioned this total across all 50 states to determine Michigan’s estimated portion. The penalty represents one percent of that calculated share, interpreted as Kalshi’s commission revenue.
This marks the third state-level prohibition against Kalshi’s sports offerings. Both Nevada and Massachusetts previously enacted similar restrictions, though Massachusetts’s order remains suspended pending appellate review.
Nevada regulators have expressed skepticism about Kalshi’s geolocation infrastructure. According to state officials, the system depends solely on IP address verification and required less than $200,000 to develop.
Nevada authorities have petitioned a Carson City court to find Kalshi in contempt. Their request includes imposing identical $120,000 daily fines along with recovery of legal expenses.
Platform Plans Legal Challenge
Kalshi announced its intention to appeal the Michigan ruling. Communications director Elisabeth Diana stated the company operates under federal jurisdiction rather than state authority.
Diana indicated Kalshi would resist what the company characterizes as pressure from established gambling industry competitors. Despite this stance, Kalshi confirmed it will begin implementing access restrictions while pursuing legal remedies.
The temporary restraining order remains effective until July 13. On that date, the court will consider whether to extend the prohibition through a preliminary injunction.
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